1994 (8) TMI 312 - HC - Indian Laws

Issues Involved:

1. Right of the petitioner-Society to admit, deny, or refuse membership.
2. Eligibility of a Hindu Undivided Family (HUF) to be a member.
3. Transfer rights of a member in a tenant-owner society.
4. Validity of Rule 12(2) of the Gujarat Co-operative Societies Rules, 1965.
5. Compliance with bye-laws for membership and transfer.
6. Entitlement of the petitioner-Society to 50% of the premium.
7. Lawfulness of the impugned orders by the District Registrar and Joint Registrar.

Issue-wise Detailed Analysis:

1. Right of the petitioner-Society to admit, deny, or refuse membership:

The petitioner-Society claimed an absolute right to admit, deny, or refuse membership without assigning any reasons. However, the court held that this contention was not tenable. The court emphasized that the right to be considered for membership implies fair consideration. Refusal of membership on flimsy or trivial grounds is open to challenge, and the aggrieved party has the right to seek remedies through civil action or before the Registrar. Therefore, the Society does not possess unfettered power to admit, deny, or refuse membership.

2. Eligibility of a Hindu Undivided Family (HUF) to be a member:

The court examined the eligibility of HUFs to be members of the Society. The petitioner-Society argued that only individuals competent to contract under the Indian Contract Act, 1872, could be members, thereby excluding HUFs. However, the court referred to judicial precedents indicating that the term "individual" can include a group of persons forming a unit, such as an HUF. Therefore, the court concluded that there is nothing in the Act preventing an HUF from becoming a member of the Co-operative Society.

3. Transfer rights of a member in a tenant-owner society:

The court addressed the contention that the respondent No. 2 had no ownership right over the plot to transfer it without the Society's permission. The court noted that the right to transfer is subject to the bye-laws of the Society and the provisions of Rule 12(2). The court held that the respondent No. 2's right to transfer the plot is valid, provided the transfer complies with the Society's bye-laws and Rule 12(2).

4. Validity of Rule 12(2) of the Gujarat Co-operative Societies Rules, 1965:

The petitioner-Society challenged the validity of Rule 12(2) on the grounds that it violated Article 19(1)(c) of the Constitution of India. The court referred to the Supreme Court's decision in Daman Singh's case, which distinguished between statutory interference in the composition of co-operative societies and the voluntary nature of associations. The court held that Rule 12(2) is regulatory and balances the right to form associations with the right to property under Article 300A. Therefore, Rule 12(2) was upheld as intra vires of the Constitution.

5. Compliance with bye-laws for membership and transfer:

The petitioner-Society contended that the respondent No. 1 did not make a proper application in the prescribed form according to the bye-laws. The court found that the necessary information required for membership and transfer was substantially complied with. The court emphasized that bye-laws govern the internal management of the Society and do not have the force of law. Therefore, the respondent No. 1's application and the transfer of the plot were valid.

6. Entitlement of the petitioner-Society to 50% of the premium:

The petitioner-Society claimed entitlement to 50% of the premium from the transfer of the plot. The court noted that the impugned orders by the District Registrar and Joint Registrar had already addressed this issue, ensuring that the Society would receive 50% of the premium. Therefore, the court found no merit in this contention.

7. Lawfulness of the impugned orders by the District Registrar and Joint Registrar:

The court reviewed the impugned orders and found no legal error warranting interference. The orders were upheld as lawful, and the court dismissed the Special Civil Application, discharging the Rule and continuing the interim order for eight weeks.

Conclusion:

All contentions raised by the petitioner-Society were rejected. The court upheld the right to fair consideration for membership, the eligibility of HUFs, the validity of Rule 12(2), and the substantial compliance with bye-laws. The impugned orders by the District Registrar and Joint Registrar were affirmed as lawful. The Special Civil Application was dismissed, and the interim order was extended for eight weeks.

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